2 January 2008
Maputo — The SADC (Southern African Development Community) Free Trade Area took effect as from Monday, and in principle the vast majority of goods produced in other SADC countries can now enter Mozambique free of customs duties.
To benefit from the scrapping of customs duties, however, importers will need to produce a certificate of origin, guaranteeing that the goods really do come from other SADC member states.
The duty free status applies to about 85 per cent of the goods on the Mozambican customs list. The liberalization only affects customs duties: where applicable, imported goods will still pay Value Added Tax (VAT).
The Ministry of Industry and Trade has been fixing at all Mozambique's entry points a list of goods that are now free of customs duties, and a list of those (mostly from South Africa)that must still pay duty.
In order to protect Mozambican producers, tariffs remain in place on certain agricultural goods for another four years. Cabbage, garlic and lettuce from other SADC members must still pay 20 per cent customs duties. So must potatoes, onions and tomatoes from South Africa - but these goods are zero-rated if they come from the rest of SADC.
Some business figures and politicians - notably Afonso Dhlakama, leader of the former rebel movement Renamo - are predicting disaster, arguing that, swamped with imports from South Africa, Mozambican industries will collapse.
The Minister of Industry and Trade, Antonio Fernando, does not agree. He argues "the country can only gain from integration, since the suppression of customs barriers will make goods much cheaper, stimulating greater production and consumption".
The customs tariffs were not abolished overnight, but have been declining, step by step, since 2001, with no evident ill-effects on Mozambican industry.
The final stage in this gradual tariff reduction came on 1 December, when the maximum tariff on most imports from SADC dropped from 20 to 10 per cent. But there was no reflection of this in any cut in prices in Mozambican shops.
Those goods that bore a customs duty of 10 per cent in December will now pay no tariff at all. The question is - will consumers gain from this, or will the benefits go exclusively to the importers and the retailers ?
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